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9 Useful Day Trading Tips From the Experts

DEC 14, 2018

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Day trading can be one of the most discouraging jobs out there. In the past, more than 80 percent of day traders have lost money.

But there are plenty of people who make big money off of trading. And most billionaires are actually self-made.

How can a person tap into the markets and make a living? We’ve nailed down day trading tips from the experts. Here are nine trading pointers for anyone looking to start day trading the right way.

First, the Basics Behind Day Trading Tips

Day trading usually consists of swapping securities during a single session. That means the trader is working within the confines of a single market day.

The market investors choose to trade within can vary in big ways. Some of the most popular markets trade cryptocurrency, futures, stocks, or big national currencies. And the amount of money an investor can pull out of those markets depends heavily on discipline and skill.

Here are the nine day trading tips professionals suggest for new traders.

1) Simplify Trading

There are a lot of options for trading. Although diversifying investments is a good idea, day trading should be focused. That means picking one item and learning it well.

Traders who juggle multiple stocks or commodities at a time can easily get distracted. They might not pick up on signals they would have seen by just focusing on one single chart.

This also has big psychological benefits because the trader isn’t spread mentally out over several markets at a time.

2) Simplify the Strategy

Experts agree simpler is better when it comes to strategy also. With so much information out there, it’s easy to get caught up in technical indicators or looking at different day trading strategies.

Some traders make many trades for small stints of profit. Others wait for longer, bigger trades and buy or sell in less frequent chunks. Focus on learning one strategy and stick to it.

And try applying that strategy to a single daily chart.

The key here is to focus on becoming an expert in one area and controlling how much you trade based on your expertise.

3) Be Ready to Adapt

Full markets can change on a dime. In September 2008, the Dow Jones dropped by nearly 20 percent in one week. But investors who were able to switch strategies quickly managed to come out ahead.

Anyone who wants to trade for a living should be willing to adapt to new market realities on short notice. And that might mean reevaluating or dropping a failing strategy.

4) Set up a Consistent Day

Anyone looking to figure out how to day trade needs to treat it like any other job. That means setting up consistent hours to focus on trading.

Too often, traders will treat day trading like it’s a hobby. Instead, block off hours for chart studying and trading.

The best traders carve out time to learn a strategy and know chart trends to perfection.

5) Practice Making Money Consistently First

One of the top day trading tips for saving money is to practice before entering live trading.

There are lots of practice trading tools that simulate markets. They let beginners trade with demo money rather than having to risk their own cash right away. Use these often.

Practice on prep accounts until consistent gains are being made on a daily basis. That way a trader can avoid having growing pains that could bankrupt them.

6) Good Investors Invest in Themselves

Rather than spending money on get rich quick schemes, the best investors spend money on educating themselves. Read books and consider reaching out to mentors for advice. And invest in tools that can help avoid day trading mistakes.

Treat investment knowledge like any job training essential. That means taking time to learn a strategy and its advantages.

By investing in self, a person can become completely independent and start generating income on their own.

7) Set Aside Money

Budgeting can be a key part of any successful day trading strategy. By knowing exactly how much money is available, a successful trader can set goals.

That also means setting aside money for education, setting up trading funds, and paying out a salary.

And professionals agree that good investors pay themselves first. The best investors set aside money from their paycheck to see more financial gains.

8) Set up Limits

Putting in a stop loss order can keep a day trader from losing big chunks of money when the market swings.

Simply put, these orders send a command to close a trade out when it hits a certain number. These are a key part of solid day trading strategy because day traders consistently act on positions. That means a massive loss could wipe out steady daily profit gains in a single day.

By setting up limits, day traders cut down the volatility of a rocky market and can make it fit into their financial strategies. For instance, if a stock is jumping from one price point to another, a stop loss can lock in a buy or sell at the high point before the price falls back down.

9) Guts are Good, but Don’t Rely on Them

When new traders start putting up real money for trades, they often let emotions get in the way of decision making.

A good way to curb emotional decisions is to set up daily goals and limits before the market starts to move. Making sure limits are in place will keep the investor from making risky gut choices.

Remember, day trading is about consistency. That means bringing in a steady income rather than searching for a big score. Knowing the ins and outs of a chart and sticking to a strategy can help curb the urge to make emotional trades.

Day Trading in the Future

These fundamental day trading tips are solid, but there are new ways to make a living through trading. And the cryptocurrency market has seen exponential growth in recent years.

Want to learn more about cryptocurrency and financial trading? Check out our blog here for more day trading tips and news about the future of investing.

Free access for 3 days

Free access for 3 days

Full-access to PRO plan, no credit card required

Full-access to PRO plan, no credit card required